Friday, December 15, 2017 /3:54PM / NSE
Oando PLC, as a responsible company recognizes and respects the authority of the Securities and Exchange Commission (SEC) to regulate the market as it deems fit. The Company would like to categorically state that no action taken thus far has been to undermine the authority of the SEC, but to protect the Company and its shareholders against the actions taken under the leadership of Mounir Gwarzo, the erstwhile Director General (DG) of the SEC.
On Tuesday, December 5, 2017, the Securities and Exchange Commission (SEC) officially notified the Company that a forensic audit into the affairs of Oando PLC (the Company) would commence on Wednesday, December 6, 2017. However, the external auditors appointed by the SEC are yet to approach the Company to commence the audit.
On Friday, December 8, 2017, new evidence emerged in the media corroborating the Company’s position that under the leadership of Mounir Gwarzo the actions taken by the Commission were illegal, invalid and calculated to prejudice the business of the Company.
The evidence, a signed report presented on September 18, 2017 by the Technical Committee set up by Mounir Gwarzo (“the Report”), was of the opinion that Oando PLC had satisfactorily responded to all the issues raised by the Petitioners and had further recommended that the responses provided by the Company and its independent external auditors should be forwarded to the Petitioners for their information and further escalation if they deemed it necessary.
The Report makes no recommendation for the shares of the Company to be suspended or for a forensic audit of the Company to be conducted; instead the Committee recommended that certain unresolved issues regarding the treatment of certain corporate transactions and certain matters arising therefrom be forwarded to the Securities and Investment Services (SIS) department of the Commission to determine whether there was in fact a breach of the ISA or the SEC Rules.
The current state of affairs indicates that Mounir Gwarzo chose to ignore the report of the Committee but instead used the minority report of the Chairman of the Committee, who in the report called for a forensic audit to be carried out solely on the allegations of related party transactions that were claimed not to have been carried out on an arms-length basis, as the foundation for his damaging actions against the Company and its shareholders.
Following the Federal High Court’s (FHC) ruling on November 23, 2017, that it did not have the jurisdiction to entertain the Company’s complaint against the actions of the SEC, the Company has since appealed the FHC ruling and applied for an injunction to preserve the res pending the hearing and determination of the appeal. The said application has been served and duly acknowledged by the SEC officials and their lawyers and a hearing of the application took place on Wednesday, December 13, 2017.
The FHC in verbal remarks made by the presiding Judge also directed the parties to refrain from any action which would overreach the pending application for injunction until it is determined, thus a commencement of the proposed forensic audit by the SEC would be in defiance of the application for an injunction. On Friday, December 15 2017 the FHC dismissed the application for lack of subject matter jurisdiction. We have immediately filed an application at the Court of Appeal for an injunction pending the determination of our appeal.
To date all actions taken by the Company have been predicated on our belief of bias and a lack of due process and fairness in the way in which the SEC, under the leadership and direction of Mounir Gwarzo, had carried out this investigation. The recommendations contained in the leaked Report and the subsequent penalties imposed by the Commission on Oando is further proof that the suspended DG of SEC was working to his own conclusions rather than looking at the facts before him and acting in the best interests of the Company and its minority shareholders.
Despite our objections to the forensic audit, the Company would like to reiterate that we recognize and respect the authority of the Commission and in the spirit of cooperation, transparency and full disclosure, the Company will comply with the directives of the Commission whilst reserving our legal rights in this matter. Accordingly, we welcome the appointment of Dr. Abdul Zubair as the Acting Director-General (ADG) of the SEC and see this as an opportunity for the regulator to act independently and for a new and enduring relationship to be established. We trust that he will investigate the matters raised in an independent and transparent manner and look forward to his support in ensuring due process is indeed followed.